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COSTCO WHOLESALE
COSTCO WHOLESALE
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Ticker: COST
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Costco Wholesale Corporation Reports Third Quarter and Year-To-Date Operating Results for Fiscal 2019

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ISSAQUAH, Wash., May 30, 2019 (GLOBE NEWSWIRE) -- Costco Wholesale Corporation (“Costco” or the “Company”) (Nasdaq: COST) today announced its operating results for the third quarter (twelve weeks) and the first thirty-six weeks of fiscal 2019, ended May 12, 2019.

Net sales for the quarter increased 7.4 percent, to $33.96 billion, from $31.62 billion last year. Net sales for the first thirty-six weeks increased 8.3 percent, to $102.90 billion, from $95.02 billion last year.

Comparable sales for the third quarter and year-to-date periods ended May 12, 2019, were as follows:

        
 12 Weeks 12 Weeks 36 Weeks 36 Weeks
   Adjusted*   Adjusted*
U.S.7.0% 5.5% 8.5% 6.9%
Canada1.3% 5.1% 1.1% 5.5%
Other International1.7% 6.9% 2.1% 5.8%
        
Total Company5.5% 5.6% 6.6% 6.5%
        
E-commerce22.0% 19.5% 24.7% 23.9%
        

*Excluding the impacts from changes in gasoline prices, foreign exchange, and a previously disclosed accounting change concerning revenue recognition (ASC 606).

Net income for the quarter was $906 million, or $2.05 per diluted share, compared to $750 million, or $1.70 per diluted share, last year. Net income for the thirty-six weeks was $2.56 billion, or $5.79 per diluted share, compared to $2.09 billion, or $4.74 per diluted share, last year.  This year’s third quarter benefitted from a non-recurring tax item of $73 million, or 16 cents per diluted share.

Costco currently operates 773 warehouses, including 536 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 28 in the United Kingdom, 26 in Japan, 16 in Korea, 13 in Taiwan, 11 in Australia, two in Spain, and one each in Iceland and France. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, and Taiwan.

A conference call to discuss these results is scheduled for 2:00 p.m. (PT) today, May 30, 2019, and is available via a webcast on www.costco.com (click on Investor Relations and “Play Webcast”).

Certain statements contained in this document constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For these purposes, forward-looking statements are statements that address activities, events, conditions or developments that the Company expects or anticipates may occur in the future. In some cases forward-looking statements can be identified because they contain words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “likely,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. These risks and uncertainties include, but are not limited to, domestic and international economic conditions, including exchange rates, the effects of competition and regulation, uncertainties in the financial markets, consumer and small business spending patterns and debt levels, breaches of security or privacy of member or business information, conditions affecting the acquisition, development, ownership or use of real estate, capital spending, actions of vendors, rising costs associated with employees (generally including health care costs), energy and certain commodities, geopolitical conditions (including tariffs), the ability to remediate material weaknesses in internal control, and other risks identified from time to time in the Company’s public statements and reports filed with the Securities and Exchange Commission. Forward-looking statements speak only as of the date that they are made, and the Company does not undertake to update them, except as required by law.

CONTACTS: Costco Wholesale Corporation
Richard Galanti, 425/313-8203
Bob Nelson, 425/313-8255
David Sherwood, 425/313-8239
Josh Dahmen, 425/313-8254


COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (dollars in millions, except per share data)
(unaudited)

    
 12 Weeks Ended 36 Weeks Ended
 May 12, 2019 May 13, 2018 May 12, 2019 May 13, 2018
REVENUE       
Net Sales$33,964  $31,624  $102,903  $95,020 
Membership fees776  737  2,302  2,145 
Total revenue34,740  32,361  105,205  97,165 
OPERATING EXPENSES       
Merchandise costs30,233  28,131  91,576  84,481 
Selling, general and administrative3,371  3,155  10,310  9,613 
Preopening expenses14  8  45  37 
Operating income1,122  1,067  3,274  3,034 
OTHER INCOME (EXPENSE)       
Interest expense(35) (37) (105) (111)
Interest income and other, net36  41  104  70 
INCOME BEFORE INCOME TAXES1,123  1,071  3,273  2,993 
Provision for income taxes207  309  679  867 
Net income including noncontrolling interests916  762  2,594  2,126 
Net income attributable to noncontrolling interests(10) (12) (32) (35)
NET INCOME ATTRIBUTABLE TO COSTCO$906  $750  $2,562  $2,091 
        
NET INCOME PER COMMON SHARE ATTRIBUTABLE TO COSTCO:       
Basic$2.06  $1.71  $5.83  $4.77 
Diluted$2.05  $1.70  $5.79  $4.74 
        
Shares used in calculation (000’s):       
Basic439,859  438,740  439,767  438,576 
Diluted442,642  441,715  442,565  441,383 
        


COSTCO WHOLESALE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 (amounts in millions, except par value and share data)
(unaudited)

   Subject to Reclassifications

      
   May 12, 2019 September 2, 2018
ASSETS   
CURRENT ASSETS   
Cash and cash equivalents$7,013  $6,055 
Short-term investments1,154  1,204 
Receivables, net1,704  1,669 
Merchandise inventories11,304  11,040 
Other current assets1,110  321 
Total current assets22,285  20,289 
PROPERTY AND EQUIPMENT   
Land6,310  6,193 
Buildings and improvements16,644  16,107 
Equipment and fixtures7,858  7,274 
Construction in progress1,412  1,140 
 32,224  30,714 
Less accumulated depreciation and amortization(11,749) (11,033)
Net property and equipment20,475  19,681 
OTHER ASSETS992  860 
TOTAL ASSETS$43,752  $40,830 
LIABILITIES AND EQUITY   
CURRENT LIABILITIES   
Accounts payable$11,331  $11,237 
Accrued salaries and benefits2,888  2,994 
Accrued member rewards1,160  1,057 
Deferred membership fees1,761  1,624 
Current portion of long-term debt1,699  90 
Other current liabilities3,993  2,924 
Total current liabilities22,832  19,926 
LONG-TERM DEBT, excluding current portion4,799  6,487 
OTHER LIABILITIES1,301  1,314 
Total liabilities28,932  27,727 
COMMITMENTS AND CONTINGENCIES   
EQUITY   
Preferred stock $0.01 par value; 100,000,000 shares authorized; no shares
   issued and outstanding		—  — 
Common stock $0.01 par value; 900,000,000 shares authorized;
   439,811,000 and 438,189,000 shares issued and outstanding		4  4 
Additional paid-in capital6,307  6,107 
Accumulated other comprehensive loss(1,321) (1,199)
Retained earnings9,496  7,887 
Total Costco stockholders’ equity14,486  12,799 
Noncontrolling interests334  304 
Total equity14,820  13,103 
TOTAL LIABILITIES AND EQUITY$43,752  $40,830 
        
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